The American 'Heritage Foundation', in partnership with The Wall Street Journal, has published the 22nd edition of the 'Index of Economic Freedom'. The Grand Duchy occupies 19th place in the ranking, which compares economic freedom in 186 countries, in part by analysing legal regulation.
The 2016 index is headed by Hong Kong (88.6 out of 100) and New Zealand (81.6). The Netherlands rank in 16th place (74.6 points), Germany in 17th, Belgium in 44th (68.4) and France in 75th (62.3) in the global listing. The Grand Duchy has moved up to 19th place in 2016 (with a score of 73.9 points), from 21st place in 2015 (73.2) The Grand Duchy is considered to be 'mostly free'.
1st in terms of freedom of investment
- excellent performances for property rights (score of 90; 3rd in the global ranking) and for absence of corruption (80; 11th place);
- less outstanding performances for fiscal freedom (62.3; 163th place) and government spending (42.2; 147th place);
- reasonable performances for business freedom (71.3; 63rd place) and monetary freedom (80.7; 46th place), but not so good for labour freedom (42.1; 163rd place);
- excellent performances for trade freedom (88.0; 11th place), investment freedom (95.0; 1st place) and financial freedom (80.0; 3rd place).
Economic freedom is defined as the absence of any kind of coercion or constraint on the part of the government regarding the production, distribution and consumption of goods and services beyond the minimum necessary to protect and maintain citizens' freedom.
It is measured using indicators in four categories ('rule of law', 'limited government', 'regulatory efficiency' and 'open markets') in 186 countries worldwide. The more an economy is open (the closer its score is to the maximum of 100 points), the fewer barriers exist to free trade and hence the higher the country is ranked.